In a previous posting, utahwaterlaw.com reported on concerns voiced by the Environmental Protection Agency (“EPA”) to the Utah Legislature over now-passed SB 110, titled “Water Quality Amendments,” which the EPA warned that SB 110’s peer review proposal violated the Clean Water Act(“CWA”). In a letter to the Utah Legislature, the EPA noted that SB 110’s plan to subject Utah Division of Water Quality actions to an independent peer review did not comply with the CWA. The letter further stated that if the law was passed without any changes, then the federal government might step in to manage water in Utah.

Peer Review Legislation Passes Despite EPA Warning

Despite a warning from the EPA, SB 110 was passed into law following the 2016 legislative session. SB 110 “establishes an independent peer review process for challenges made to proposals from the Division of Water Quality; and establishes the requirements, including selecting the panel of independent experts,” among other things.

With the passage of SB 110, Utah became the third state – joining Minnesota and California – to pass legislation on scientific review of administrative rulemaking. However, neither the legislation passed in Minnesota nor California, go nearly as far as SB 110. Essentially, SB 110 allows challenges of “pretty much any activity, rule, standard or initiative” from the Division of Water Quality or the Water Quality Board, said Walt Baker, DWQ director. “We’re breaking some ground here that has not been broken before,” he said.

Peer Review Legislation Allows “Pay-for-Play” Rulemaking

The primary impact of SB 110 is that it allows stakeholders to pay to challenge the science behind water regulations proposed by the Division of Water Quality. Once a decision is challenged, a three-person panel made up of scientists selected by both the challenging party and the Division of Water Quality determines whether the action is scientifically defensible. If the panel determines that the action is not scientifically defensible, then the Division of Water Quality may not be allowed to proceed on its rule.

Leland Myers, Central Davis Sewer District manager and the chief spokesman for the coalition of water managers who drafted the original bill, heralded the plan as one that would benefit citizens and make state regulators more thorough in their science.

“The biggest benefit is that it allows for a review and makes everyone a little more cautious to make sure they follow good science,” he said. “I think the bar is set high enough that it won’t be used frivolously.”

As noted, an especially important portion of SB 110 requires that those challenging the Division of Water Quality action to pay all expenses associated with the peer review, which is estimated to cost approximately $65,000 per year. This “pay-for-play” type rulemaking has created the most controversy, and has prompted some environmental groups to petition the EPA to block the “Water Quality Amendments.”

Environmental Groups Petition EPA Over Peer Review Legislation

Earlier this month, more than half a dozen environmental groups filed a petition asking the EPA to revoke Utah’s authority to administer portions of the CWA. In their letter, the groups, headed by Friends of the Great Salt Lake, told the EPA that the passage of SB 110 directly undermines the ability of the Division of Water Quality to enforce the CWA by way of the new peer review system. The letter argues that the law is a covert attempt to legalize “pay-for-play” rule-making, which the groups say impermissibly allows only those with deep pockets to challenge water quality decisions.

Rob Dubuc, an attorney with Western Resource Advocates, which is representing Friends of the Great Salt Lake, called the peer review statute unprecedented and offensive.

According to the petition, the statute violates federal law by creating potential scenarios where the peer review panel could trump federal mandates by restricting the public’s access to water-quality decisions and circumventing the judicial system.

EPA Can Overtake CWA Enforcment if DWQ is Unwilling or Unable to Fulfill Duties

The EPA authorizes the Division of Water Quality to oversee and enforce provisions of the CWA under what is essentially a contractual partnership. In the event the EPA determines that the Division of Water Quality is unwilling or unable to fulfill its responsibilities, the EPA may revoke the Division of Water Quality’s administrative authority and take over the management of CWA programs in Utah — including the authority to issue water quality permits.

There are currently only four states that have not delegated authority under the CWA, Baker said, and one of those — Idaho — is currently seeking delegation.

Utah Lawmakers Warned of “Gaps” in Peer Review Legislation

Baker said he warned lawmakers during the session that the statute had some “gaps relative to public participation” that had drawn scrutiny from the EPA. Baker said he hopes that the Division of Water Quality will be able to craft administrative rules to fill in the “holes” and appease both the EPA and the environmentalists.

Baker said he began drafting such rules while the statute was still being discussed, and has already shared them with some stakeholders. Baker expects to introduce the rules to the state Board of Water Quality next month.

But Duboc said he is skeptical that administrative rules will be able to go far enough to remedy the “fundamental flaws” of SB 110. The environmental groups he represents are not unhappy with the Division of Water Quality, Duboc said, and don’t necessarily believe the EPA would be any better at preserving Utah’s waters.

“No one wants EPA to come in and take over this program,” Duboc said. “EPA doesn’t want that, the state doesn’t want that, and we don’t necessarily want that, but this legislation backs us into a corner. … One way or the other, this peer review panel has to go away. If that takes the EPA coming in and running the program, so be it.”

While it is unclear whether the environmental groups would support the Division of Water Quality action challenge process without the pay-for-play provision, it is clear that as it stands currently, the “Water Quality Amendments” are not amenable. The environmental groups’ petition raises the question whether it is fair to allow only those that can afford it can challenge water quality decisions, or if the legislation was passed to allow rich companies or other potential polluters to pay for scientific peer review of water quality actions. The EPA has said that is has received the petition and is in the process of reviewing the petition. Utahwaterlaw.com will continue to follow this story as it unfolds.

What is a General Adjudication? General Adjudication is a legal process to determine who has a valid water right, how much water can be used, and who has priority during shortages.

Upon a Petition, the State Engineer May Investigate Water Rights and File an Action for General Adjudication

Pursuant to Utah Code section 73-4-1, “five or more, or a majority of, water users of a water source” may petition the State Engineer to investigate “the rights of all claimants to the water of the water source.”

Upon receipt of a petition to investigate, the State Engineer is required to “investigate whether the facts and circumstances of the water source and its claimants justify a general determination of water rights,” and if the State Engineer finds that a general determination of water rights is justified, then the State Engineer may “file an action in the district court for a general adjudication of water rights.”

State Engineer Must Give Notice of Filing of General Adjudication

Once an action for a General Adjudication is filed by the State Engineer, or other qualified persons as explained in Utah Code section 73-4-3, “[t]he state engineer then shall … give notice of commencement of action to the claimants by publishing notice” for “two consecutive weeks” in a newspaper designated by the court and in accordance with Utah Code section 45-1-101 “for two weeks.” The notice shall state that “an action has been filed,” “the name of the action,” “the name and location of the court in which the action is pending,” and “the name or description of the water source involved.”

After serving notice of commencement of an action, the State Engineer is required to investigate and locate all possible claimants and serve each claimant with a summons in accordance with Utah Code section 73-4-4. The State Engineer is then required to begin a “survey of the water source and the ditches, canals, wells, tunnels, or other works diverting water from the water source,” and “hold a public meeting in the survey area to inform a water right claimant of the survey.”

Water Right Claimant Must File Notice of Claim

Once completed, the State Engineer shall serve notice of the completion of the survey, including that any claimant to a water right must in accordance with Utah Code section 73-4-5 “submit a written statement of claim within 90 days after the day on which the notice is issued.” The statement of claim shall include:

(1) the name and address of the claimant; (2) the nature of use on which the claim of appropriation is based; (3) the flow of the water used in cubic feet per second, or the quantity of water stored in acre-feet, and the time during which the flow or stored water has been used each year; (4) the name of the stream or other source from which the water is diverted, the point on the stream or source where the water is diverted, and a description of the nature of the diverting works; (5) the date when the first work for diverting the water began, and a description of the nature of the work; (6) the date when the water was first used, the flow in cubic feet per second, or the quantity of water stored in acre-feet, and the time the water was used during the first year; (7) the place and manner of current use; and (8) other facts that clearly define the extent and nature of the appropriation claimed, or that are required by the written form provided by the state engineer with the notice of completion of survey.

State Engineer Then Issues Proposed Determination

The written statements of claims are compiled by the State Engineer, and then are submitted to the clerk of the district court in which the action is pending. Next, the State Engineer prepares a Proposed Determination under Utah Code section 73-4-11. The Proposed Determination is the State Engineer’s recommendation to the court of the status and quantification of water rights in the area. A copy of the Proposed Determination is sent to each claimant. If a claimant is dissatisfied with the Proposed Determination, the claimant has ninety days to file an objection with the court. After all objections have been resolved and, if necessary, modifications made to the Proposed Determination, the court enters a Decree that establishes all of the water rights for the area.

Current Pending General Adjudication Actions

In Utah, there are currently 13 pending General Adjudication actions. Most of the General Adjudication actions have been pending for decades now, including the Utah Lake/Jordan River drainage basin General Adjudication action, which has been pending since 1936. Of the 13 pending General Adjudication actions, there has been recent activity in: 1) Area 05 near Moab in the Southeastern Colorado River basin; 2) Area 29 in the Bear River basin; and 3) several areas in the Utah Lake/Jordan River basin, including Area 51 near Birdseye and Hobble Creek, Area 53 near Goshen, and Area 57 in the Harmony Park area and the Emigration Creek area.

There are also two different matters that are being addressed in the Utah Lake/Jordan River General Adjudication, including proposed legislation during the 2016 Utah legislative session, which the State Engineer proposed in order to streamline all General Adjudications. Senate Bill 75, “modifies the procedure for adjudicating water rights.” Specifically, S.B. 75 “requires the state engineer to identify all possible claimants in a particular area during an adjudications, if the state engineer’s records are incomplete,” as well as modifying “the procedure following the commencement of an action by the state engineer.” Under those modified procedures, “the failure or a potential party to file a timely statment of claim constitutes a default against that party.” additionally, S.B. 75 requires the state engineer “to authorize one extension to those seeking to file a statement of claim,” and after full considerations of claims and an examination of the river system or water source involved, to: complete a hydrographic survey map; prepare a proposed determination of all rights to the use of the water and file it with the district court; serve notice by publication and by mail; and hold a public meeting[.]”

State Engineer Motions for Appointment of Special Master in Utah Lake/Jordan River General Adjudication

The State Engineer has also motioned the district court in the Utah Lake/Jordan River General Adjudication to appoint a Special Master to assist with resolving objections and other specific issues in this long-pending case. The Special Master will be compensated from appropriations by the Legislature to help speed up resolution of these adjudications. However, the State Engineer’s motion is still pending.

Settlement and Stipulation Entered in Utah Lake/Jordan River General Adjudication

Prior to the State Engineer’s motion to appoint a Special Master, a settlement was reached and a stipulation was entered in the Utah Lake/Jordan River General Adjudication in 2014 over public input and objections in relation to the instant general adjudication.

The 2016 General Session of the 61stUtah State Legislature concluded on March 10, 2016. This year’s legislative session produced a number of Utah water law bills, some of which passed and others that did not. The following represents a list of those Utah water law bills that were passed into law during the legislative session, as well as a shorter list of those Utah water law bills that did not pass. In all, the Utah State Legislature considered 19 water law related bills or resolutions during the 2016 legislative session. Of those 19, the Utah Legislature passed 10 water law bills or resolutions into law.

Utah Water Law Bills/Resolutions That Passed:

House Bill 222 “states that approval of one or more nonuse applications, or successive overlapping nonuse applications, does not protect a water right that is already subject to forfeiture, nor does the approval of one or more nonuse applications constitute beneficial use of the water for purposes of calculating the 15-year period in Subsection (2)(c)(i).” Thus, under the newly passed amendments, neither an approved nonuse application, nor successive overlapping nonuse applications, protect a water right that is already subject to a forfeiture. Furthermore, the approval of one or more nonuse applications does not constitute beneficial use.

House Bill 305 was introduced in order toe “deal[ ] with the accuracy of water use data. HB 305 “instructs the Drinking Water Board to require certified water operator of a public water supplier, or professional engineer performing the duties of an operator, to verify the accuracy of water use and supply data submitted to the Utah Division of Drinking Water.” HB 305 further “authorizes the Utah Division of Water Rights to collect and validate water use data,” and to “make[ ] [other] technical changes.”

House Bill 305 was introduced by Representative Joel Briscoe and was sponsored by Senator Margaret Dayton. The bill passed the House by a 67-0 vote, and passed the Senate by a 22-0 vote.

House Bill 464 “requires the Conservation Commission within the Department of Agriculture and Food to work with Utah State University and certain conservation districts to: complete a study and economic analysis of certain issues regarding wildfires on public lands within Utah, including the impact of wildfires on the state’s watershed and air quality; and report to the Legislature’s Commission for the Stewardship of Public Lands; and allows the Conservation Commission to contract with another state agency or private entity to complete the required study and economic analysis.study the environmental and economic impacts of wildfires on Utah public lands.” In order to accomplish the requirements set forth by the HB 464, the Legislature “appropirate[d] in fiscal year 2016: to the Department of Argiculture and Food as a one-time appropriation, from the General Fund, one-time $200,000.”

Utah Governor Gary Herbert signed House Concurrent Resolution 1 on March 1, 2016. HCR 1 expresses the Governor’s and Legislature’s “support to Attorney General Sean Reyes in seeking to vacate a federal defining ‘waters of the United States.” Specifically, HCR 1 “expresses disapproval of the expansion of the term ‘waters of the United States’ to include ephemeral drainages, dry washes, gullies, coulees, and arroyos, which only move after rain; and expresses support for Attorney General Sean Reyes in seeking to vacate this expansive rule.”

House Joint Resolution 4 “urges Utah’s congressional delegation to support the efforts of Utah water users organizations to secure title transfer of project works and project water rights free from terms and conditions that were not contemplated at the time of the repayment contracts.” HJR 4 “calls upon Utah’s congressional delegation to support Utah water users organizations that have repaid, or wish to repay, reclamation projects to secure title transfer of project works and project water rights free from terms and conditions that were not contemplated at the time of the repayment contracts.”

Senate Bill 23 “modifies the definition of a ‘protected purchaser.'” The modified definition of protected purchaser “means a purchaser of a certified or uncertified security, or of an interest in the security, who: gives value; does not have notice of an adverse claim to the security; obtains control of the security; and for a share a share of stock issued by a land company or a water company: pays, or whose predecessors in interest paid, an assessment levied against the share of stock for at least four of the immediate past seven years by the land company or the water company; or has used, or whose predecessors in interest have used, either directly or indirectly the water available under the share of stock issued by a water company for at least four of the immediate past seven years.” Beyond “acquiring the rights of a purchaser, a protected purchaser acquires the purchaser’s interest in the certificated or uncertificated security, share of stock in a land company, or share of stock in a water company free of any adverse claim.”

The bill was introduced by Senator Margaret Dayton, and was sponsored by Representative Keith Grover. The bill passed the Senate by a 29-0 vote, and passed the House on a final vote of 67-0.

Senate Bill 28 “requires retail water providers to establish an increasing rate structure for culinary water,” and to “provide certain information to customers.” According to SB 25, “A retail water provider … shall: establish a culinary water structure that; incorporates increasing block units of water used; and provides for an increase in the rate change for additional block units of water used as usage increases from one block to the next[.]” Additionally, SB 28 requires that a retail water provider “provide in the customer billing notices, or in a notice that is distributed to customers at least annually, block unit rates and the customer’s billing cycle; and include individual customer water usage in customer billing notices.”

Senate Bill 75 “modifies the procedure for adjudicating water rights.” Specifically, SB 75: “requires the state engineer to identify all possible claimants in a particular area during an adjudication, if the state engineer’s records are incomplete; modifies the procedure following the commencement of an action by the state engineer; states that the failure of a potential party to file a timely statement of claim constitutes a default against that party; requires the state engineer to authorize one extension to those seeking to file a statement of claim; requires the state engineer, after a full consideration of claims and an examination of the river system or water source involved, to: complete a hydrographic survey map; prepare a proposed determination of all rights to the use of the water and file it with the district court; serve notice by publication and by mail; and hold a public meeting; and makes technical changes.”

The bill was introduced by Senator Margaret Dayton, and was sponsored by Representative Scott D. Sandall. The bill passed through the Senate by a 27-0 vote, and passed the House by a vote of 66-0.

Senate Bill 80 “modifies provisions relating to infrastructure funding” to appropriate revenue from the Transportation Investment Fund to the Water Infrastructure Restricted Fund through 2012. for FY 2017-18, the revenue will be split 80-20 between the Transportation Investment Fund and the Water Infrastructure Restricted Fund. However, by 2012, the revenue will be entirely appropriated to the Water Infrastructure Restricted Fund.

The bill was introduced by Senator Stuart Adams, and was sponsored by Representative Lee B. Perry. The bill passed the Senate by a 19-10 vote, and passed the House by a vote of 48-26, with the House adding an amendment to the Senate bill. The senate passed the House amendments by a vote of 18-8.

Senate Concurrent Resolution 1 “encourages public water suppliers to implement universal metering.” The resolution: “notes that, as the second most arid state in the country, Utah needs to conserve water; states when citizens know how much water they are using, they tend to voluntarily conserve that water; and encourages public water suppliers to implement metering on all retail public and private water systems.”

The resolution was introduced by Senator Scott K. Jenkins, and was sponsored by Representative Lee B. Perry. The resolution passed through the Senate by a 28-0 vote, and passed the House by a vote of 59-3.